Is the Washington, D.C.-region in another real estate bubble?

Writing at The Washington Post's "Where We Live" blog, Lisa A. Sturtevant, a professor in George Mason University’s School of Public Policy, asked, "Is the Washington, D.C.-area housing market bubbling again?" She points out that average home prices in metropolitan Washington were up by double-digit percentages in three out of the past four months, and some real estate watchers are wondering if we are heading toward unsustainable levels.  Sturtevant asks:

How can prices in some neighborhoods be back to where they were at the peak of the housing market?  How can there be bidding wars again where potential buyers have to be prepared to make an offer — often with an escalation clause — at the open house?  How can it be so difficult for a first-time homebuyer to find a house in her price range that is not too far from her job? Are these all signs that we’re headed for another bubble here in the Washington area, even as much of the rest of the country is just beginning to feel recovery in their housing markets?

"The short answer is no," she writes. "At least not the kind of bubble we experienced in 2002 through 2006." She notes that the critical difference between the current market and the overheated market of the middle of last decade is the nature of the mortgage market. We have stricter underwriting standards, and the demand is more based on market fundamentals. Check out her full post here.
 

Please contact me, Mynor Herrera, for expert advice on everything real estate. I am licensed in Washington, D.C., Maryland, and Virginia. And I specialize in Bethesda and Chevy Chase, as well as the subdivisions of Rosemary Hills, Rock Creek Forest, East Bethesda and Whitehall Condominium.